Doubling Down on Errors: Urban Institute Defends Its Ridiculously High Single Payer Cost Estimates

1. Administrative savings, Part 1: The original UI report projected that single payer could cut insurance overhead from the current 9.5 percent of health spending ($341 billion) to 6 percent ($215 billion). As they now admit, they were modeling a compromised single-payer system, in which private managed care insurers like UnitedHealthcare would continue to play a major role, as they do in the Medicare Advantage program. (Neither we nor Sanders have suggested such a continued role for private insurers.) We pointed out that Canada’s single-payer system runs for 1.8 percent overhead (a figure they impugn, but which is taken directly from Canada’s official health statistics), and is similar to the overhead in the traditional Medicare program. Reducing our insurance overhead to the Canadian level would mean cutting it to “only” $65 billion. There’s no reason to believe we can’t be as efficient as Canada if we, like Canada, proscribe participation by private insurers.